State Street (STT) AI Stock Analysis

• Market Cap: $31.22B
• Dividend Yield: 2.78%
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.97
• Revenue Growth: 15.02%
• EPS Growth: 66.71%
• Country: US
• Employees: 52,711
• Sector: Financial
• Sector Strength: 81
• Industry: Asset Management
• EPS (TTM): 2.04
• Shares Outstanding: 285,181,600
• 10 Day Avg. Volume: 2,229,921
• 30 Day Avg. Volume: 1,760,647
• PEG Ratio: 1.20
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.51
• Enterprise Value/Market Cap: 1.94
• Enterprise Value/Revenue: 0.71
• Enterprise Value/Gross Profit: 4.65
• Enterprise Value/Ebitda: 4.19
• 1Y Price Target: $110.00
• Price Target Upside: 0.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 70 Neutral
• Price Target: $120.00 ▲(9.60%Upside)

State Street's strong earnings performance and attractive valuation are the primary drivers of its score. The company's robust financial performance, despite high debt and negative cash flows, and bullish technical indicators further support the score. However, caution is advised due to potential short-term overbought conditions and external uncertainties.

Positive Factors

Earnings Growth

A decade of underperformance should start to reverse given estimate for EPS growth, aided by better new business wins, pre-tax margins, NII, and buybacks.

Strategic Growth

STT announced a significant win with an APAC asset owner, contributing to $154M in annual servicing fee wins.

Valuation

Valuation screens very attractively, with STT being the most heavily discounted bank on 2026 P/E, even cheaper than Citi.

Negative Factors

Asset Management Instability

AUM net outflows were driven mainly by a singular client transition, suggesting some instability in asset management.

Lack of Catalysts

Lack of idiosyncratic catalysts and better relative risk/reward elsewhere keeps the rating at Underperform.

Revenue Challenges

Net interest income missed expectations due to lower net interest margin, although this was mostly offset by higher earning assets.

State Street Business Overview & Revenue Model

Company Description

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody; product accounting; daily pricing and administration; master trust and master custody; depotbank services; record-keeping; cash management; foreign exchange, brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded fund under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

How the Company Makes Money

State Street generates revenue through several key streams, primarily its Investment Servicing and Investment Management segments. The Investment Servicing segment is the largest, providing fund accounting, custody, and related services, earning fees based on the assets under custody and administration. This includes services such as middle and back office solutions, securities lending, and foreign exchange trading. The Investment Management segment, conducted through State Street Global Advisors, offers investment management services and earns fees based on assets under management (AUM). State Street also engages in securities finance and foreign exchange trading, contributing to its revenue. Additionally, the company benefits from strategic partnerships and collaborations with other financial institutions to expand its service offerings and geographic reach.

State Street Financial Statement Overview

Summary

State Street shows strong profitability with high gross and net profit margins. However, challenges include high debt levels and negative cash flows, which require attention to ensure financial stability.

Income Statement

State Street's income statement shows a solid gross profit margin of 99.2% for TTM, indicating efficient cost management. The net profit margin has improved to 22% in the TTM from 20.8% in 2024, reflecting enhanced profitability. Revenue growth is modest with a 0.9% increase in the TTM period. However, EBIT margin at 25.4% is strong, and there's a notable recovery from the negative EBIT recorded in 2024.

Balance Sheet

The balance sheet reflects a stable equity position with an improving equity ratio of 7.2% in the TTM. The debt-to-equity ratio is relatively high at 0.93, posing a potential risk, although it has decreased from 1.31 in 2024. Return on equity is favorable at 10.7% for the TTM, indicating solid returns for shareholders.

Cash Flow

State Street's cash flow situation is challenging with a negative free cash flow of $6.54 billion in the TTM, although there is slight improvement from $14.14 billion negative in 2024. Operating cash flow is negative, suggesting cash generation issues. The operating cash flow to net income ratio is also unfavorable, indicating reliance on non-operational cash sources.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.15B	21.97B	18.37B	13.67B	12.03B	12.07B
Gross Profit	13.01B	12.84B	11.90B	12.11B	12.06B	11.61B
EBITDA	4.13B	4.00B	3.20B	4.48B	4.73B	4.41B
Net Income	2.87B	2.69B	1.94B	2.77B	2.69B	2.42B
Balance Sheet
Total Assets	372.69B	353.24B	297.26B	301.45B	314.62B	314.71B
Cash, Cash Equivalents and Short-Term Investments	4.66B	62.04B	48.57B	44.55B	183.39B	179.47B
Total Debt	36.70B	33.11B	21.50B	17.09B	13.60B	17.79B
Total Liabilities	346.00B	327.91B	273.46B	276.26B	287.26B	288.51B
Stockholders Equity	26.69B	25.33B	23.80B	25.19B	27.36B	26.20B
Cash Flow
Free Cash Flow	-4.37B	-14.14B	-126.00M	11.22B	-7.52B	2.97B
Operating Cash Flow	-7.20B	-13.21B	690.00M	11.95B	-6.71B	3.53B
Investing Cash Flow	-12.78B	-1.32B	12.74B	6.82B	-2.17B	-65.53B
Financing Cash Flow	21.21B	51.79B	-13.35B	-18.43B	9.05B	62.17B

State Street Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STT, the sentiment is Positive. The current price of 109.49 is above the 20-day moving average (MA) of 100.13, above the 50-day MA of 95.68, and above the 200-day MA of 92.45, indicating a bullish trend. The MACD of 3.34 indicates Negative momentum. The RSI at 81.68 is Negative, neither overbought nor oversold. The STOCH value of 94.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STT.

State Street Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SEIC	81 Outperform	$11.45B	20.02	26.62%	1.06%	10.23%	26.56%
TROW	81 Outperform	$22.02B	11.34	19.47%	5.08%	6.51%	4.52%
BK	78 Outperform	$65.88B	15.01	11.29%	2.04%	10.30%	49.77%
NTRS	71 Outperform	$25.69B	12.33	17.54%	2.27%	21.00%	137.62%
STT	70 Neutral	$31.22B	12.30	11.21%	2.78%	15.02%	66.71%
Sector *	67 Neutral	$16.84B	11.72	9.71%	3.76%	11.61%	-9.60%
BEN	64 Neutral	$12.79B	35.25	2.84%	5.16%	7.02%	-60.38%

State Street Corporate Events

State Street Shareholders Vote on Key Matters

At the Annual Meeting on May 14, 2025, State Street shareholders voted on several key matters, including the election of eleven directors and the approval of an advisory proposal on executive compensation. The meeting also saw the ratification of Ernst & Young LLP as the independent registered public accounting firm for 2025. However, two shareholder proposals, one for a policy requiring an independent board chair in the next CEO transition and another for a report on worker transition and community fairness in its finance strategy, were not approved.

The most recent analyst rating on (STT) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on State Street stock, see the STT Stock Forecast page.

State Street Appoints John F. Woods as CFO

On April 30, 2025, State Street Corporation announced the appointment of John F. Woods as Chief Financial Officer, effective by August 25, 2025. Woods, who has extensive experience in finance leadership roles at Citizens Financial Group and MUFG, will replace interim CFO Mark R. Keating. The appointment includes a comprehensive compensation package for Woods, reflecting his transition from Citizens and aligning with State Street’s executive compensation framework.

State Street Reports Strong Q1 2025 Earnings Growth

On April 17, 2025, State Street reported its first-quarter 2025 results, highlighting a 49% increase in earnings per share (EPS) to $2.04 and a 5% rise in total revenue. The company achieved positive fee and total operating leverage, with servicing fees up 4% and management fees up 10%. State Street also announced the redemption of its $1 billion Senior Notes due 2026, planned for May 18, 2025, using cash on hand. This move reflects the company’s strong financial performance and strategic focus on capital management, positioning it well amidst geopolitical and economic uncertainties.